District of Columbia Statement or Legend on Stock Certificate - Notice of Restriction on Transfer - Stock not Registered - Intrastate Exemption

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-1057BG
• Format: Word; Rich Text

Description

A Legend is a statement on a stock certificate noting restrictions on the transfer of the stock, often due to SEC requirements for unregistered securities. The Securities Act of 1933 regulates the initial sale of securities to the public. Some securities are exempt from coverage of the Act. Certain stock issue transactions are also exempt (i.e., exempt from registration with the Securities and Exchange Commission). The most common exempt transaction that close corporations take advantage of is the intrastate offering. To qualify for this exemption, both the investors and the issuer must all be residents of the same state. The issuer must also meet the following requirements: • 80% of its assets must be located in the state; • 80% of its income must be earned from operations within the state; and • 80% of the proceeds from the sale must be used on operations within the state. Also, for nine months after the issuance, the stock can only be sold to state residents. Title: District of Columbia Statement or Legend on Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption Description: When it comes to stock certificates in the District of Columbia, it is important to understand the nature of the statement or legend placed on them, particularly the Notice of Restriction on Transfer and the mention of Stock Not Registered under the Intrastate Exemption. By including these key elements, the stock certificate undergoes certain limitations on transferability and signifies compliance with local regulations. 1. Notice of Restriction on Transfer: The Notice of Restriction on Transfer is a statement placed on District of Columbia stock certificates. It denotes that the shares represented by the certificate have certain restrictions on their transferability. These restrictions may include limitations on selling, gifting, or otherwise transferring the stock to another individual or entity. 2. Stock Not Registered: Another crucial aspect of the District of Columbia stock certificate statement or legend is the mention that the stock represented on the certificate is not registered. This implies that the stock has not been officially recorded or recognized by the District of Columbia regulatory authorities. Stock certificates with this legend indicate that the shares have not undergone the formal registration process, which is typically required for publicly traded securities. 3. Intrastate Exemption: The inclusion of the term "Intrastate Exemption" further clarifies the stock certificate's status. It suggests that the stock in question falls under a specific exemption provided by the District of Columbia securities laws, allowing it to be traded only within the state's borders. This exemption typically applies to companies that conduct business exclusively within the District or have a limited number of shareholders who are residents of the District. It is essential for investors, shareholders, and companies to be aware of these statement or legend types on District of Columbia stock certificates. Understanding the restrictions and compliance requirements related to transferability and registration can help ensure compliance with local securities regulations and prevent potential legal complications. It is advisable to consult with legal professionals or financial advisors well-versed in District of Columbia securities laws for comprehensive guidance.

Title: District of Columbia Statement or Legend on Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption Description: When it comes to stock certificates in the District of Columbia, it is important to understand the nature of the statement or legend placed on them, particularly the Notice of Restriction on Transfer and the mention of Stock Not Registered under the Intrastate Exemption. By including these key elements, the stock certificate undergoes certain limitations on transferability and signifies compliance with local regulations. 1. Notice of Restriction on Transfer: The Notice of Restriction on Transfer is a statement placed on District of Columbia stock certificates. It denotes that the shares represented by the certificate have certain restrictions on their transferability. These restrictions may include limitations on selling, gifting, or otherwise transferring the stock to another individual or entity. 2. Stock Not Registered: Another crucial aspect of the District of Columbia stock certificate statement or legend is the mention that the stock represented on the certificate is not registered. This implies that the stock has not been officially recorded or recognized by the District of Columbia regulatory authorities. Stock certificates with this legend indicate that the shares have not undergone the formal registration process, which is typically required for publicly traded securities. 3. Intrastate Exemption: The inclusion of the term "Intrastate Exemption" further clarifies the stock certificate's status. It suggests that the stock in question falls under a specific exemption provided by the District of Columbia securities laws, allowing it to be traded only within the state's borders. This exemption typically applies to companies that conduct business exclusively within the District or have a limited number of shareholders who are residents of the District. It is essential for investors, shareholders, and companies to be aware of these statement or legend types on District of Columbia stock certificates. Understanding the restrictions and compliance requirements related to transferability and registration can help ensure compliance with local securities regulations and prevent potential legal complications. It is advisable to consult with legal professionals or financial advisors well-versed in District of Columbia securities laws for comprehensive guidance.